By Ken Crowell
Hiring someone you know feels like a no-brainer. Working with a friend, family member, or acquaintance is undoubtedly comfortable, making hiring seem easier and less risky. After all, you won’t need to administer countless tests and interviews since you already trust them and believe in their abilities and work ethic.
However, did you know that 70% of businesses [1] fail after having a generation of workers who are related? A contributing reason could be that management misses out on qualified employees unrelated to them.
On the flip side, traditional hiring practices operate on merit instead of personal connections. They ensure candidates pass screenings based on skills aligning with your business’s needs. Sidestepping these standards in favor of familiarity can cause problems for your company, some of which we’ll discuss in this article.
How Does Hiring Someone You Know Affect Your Business?
Hiring someone you know might seem like an easy and convenient solution. However, it can lead to operational difficulties and employee conflicts that’ll negatively affect your team in the long run. Here are several ways it can impact your workplace, plus how to mitigate these risks.
1. Workplace dynamics
It’s easy to assume that familiarity makes communication smooth and the work environment more harmonious. The idea is that the rapport you’ve built with will translate into better cooperation and less conflict within your workplace.
However, personal relationships often cloud objectivity. It can lead to bias in communication, task delegation, and problem-solving. Other employees might also think that the person you hired gets special treatment or receives better employee benefits. It’s not surprising—75% of executives [2] admit to witnessing workplace favoritism and bias.
To maintain healthy workplace dynamics, treat every employee equally, whether you know them outside work or not. Consider setting performance metrics and objective reviews. Also, be transparent; your team should understand the reasons behind your hiring decisions and know that you hold everyone to the same standards.
Moreover, regularly solicit feedback from all employees to know their concerns and value for their contributions.
2. Professional boundaries
Hiring a family member or friend blurs the lines between personal and professional life. Most people assume it fosters a more relaxed and productive environment. After all, when you know someone personally, approaching difficult conversations or giving feedback feels more comfortable.
However, it might backfire. Personal loyalties might affect your ability to offer constructive criticism, hold them accountable for their shortcomings, or make difficult decisions, like terminating them. Additionally, the person may take liberties others wouldn’t, such as requesting flexible hours or more lenient deadlines. These problems create workplace tension when other employees see your preferential treatment.
So, set clear boundaries from the get-go. Enforce a formal onboarding process and have clear performance expectations equally for all employees. A personal relationship mustn’t hinder you from treating them the same way you’d treat any other staff member. In effect, you draw the line between your personal and professional life, helping you become a more effective leader.
3. Decision-making processes
Your friends and family know who you are and how your brain works. So, it’s easy to assume that alignment becomes more straightforward, especially regarding important business decisions.
But, because of this very reason, your decisions become biased and impractical. Whether you realize it or not, you’re more inclined to favor their ideas, opinions, or recommendations over those of others, even when their inputs aren’t the best for your business.
It also limits your team’s diversity of thought. McKinsey and Company found that the most diverse companies—in terms of race, gender, and overall differences—regularly outperform their peers [3]. Personal connections inhibit diversity since they stifle fresh perspectives that could benefit the company.
To avoid these issues, actively seek input from all team members to create a workplace that encourages and values diverse opinions. Also, structure your decision-making processes to rely on data and logic rather than subjective factors, especially personal connections. This way, all decisions are in your business’s best interests.
4. Company reputation
Hiring someone you know seems harmless. You might even think it gives off the impression that your business nurtures a close-knit workplace culture. However, nepotism, which 77% of companies [4] do, leaves 68% of job seekers to miss out on open roles.
Remember, nepotism can damage your company’s reputation. For one, customers and clients may question your business’s professionalism. Top talent may avoid applying for your vacancies since you’ve already built a reputation of stunting worker advancement unless they have personal ties to your company.
A simple way to resolve this problem is to establish a hiring process focusing on qualifications and experience. If you hire someone you know, be upfront about your decision and clarify that the individual went through the same competitive process as any other candidate, such as evaluating their skills or attention to detail.
5. Actual qualifications
Let’s say you hired your cousin as an administrative assistant, even though they have little experience with the role. Perhaps you thought you could easily train them. However, you found that instead of jumping into the role, they struggle, ask lots of questions, and make mistakes. These setbacks pull you away from other important tasks.
In the end, the business suffers because you’re spending too much time training instead of focusing on growth. This situation highlights how hiring someone without the right skills can slow things down, even if they’re a friend or family member.
Relying on your connection doesn’t guarantee the person you hired will do a great job. They might even feel too comfortable at work and do the bare minimum because they know you won’t be as strict with them as you would be with a regular employee.
To avoid this sticky situation, ensure everyone, including friends and family, meets the same professional standards. If you bring them on board, hold them accountable like anyone else. That way, you maintain a positive work environment while keeping things fair and professional.
Make Smart, Skill-Based Hiring Decisions
Hiring should always prioritize your business’s needs above personal connections. While it may seem advantageous to bring someone familiar into your team, weighing their qualifications and the risks they bring is essential. In short, treat them like any other worker. Connections may be valuable, but they should never override the importance of fairness and professionalism in the workplace.
About the Author
Ken Crowell is the Founder and CEO of EmployTest. EmployTest has helped more than 7000 corporate and government customers of all sizes in every US state and Canadian province, as well as more than 17 countries across six continents. EmployTest administers more than 60,000 tests to job applicants every year. Ken is also the Founder of the HR Leadership Roundtable on LinkedIn. Ken is a proud alumnus of the University of Georgia (BBA) and Georgia State University (MBA). Ken is part of the leadership team of Rotary (District 6900), a service organization with more than 4000 members across Georgia, and has previously managed screening compliance for Rotary volunteers. Ken lives in metro Atlanta with his wife Amy and three teenagers and has the goals of reaching the highest point of every state and enjoying an espresso in 100 countries.
